For many people, tax season can feel a lot like Christmas morning. With more than 70% of U.S. taxpayers expecting to receive some sort of refund this year, according to IRS, that means Americans have essentially three choices to make with the extra cash on hand: save it, spend it or pay down debt.

Chris Whitlow, CEO of Edukate, a workplace financial wellness website, says Americans need to think outside the box and use their newfound cash wisely and avoid dumb mistakes to make a positive impact on their financial future. “A tax refund feels great when it arrives in your bank account, but without a plan for what to do with it, you’re less likely to put it to good use,” Whitlow tells FOX Business. He says in order to make the best use of your tax refund, start by planning where the money will go. “The best money moves are the ones that prioritize saving and investing and don’t involve making big purchases that are going to depreciate in value,” he adds.

Here is Whitlow’s advice on five smart moves to make with your tax refund and five dumb things to avoid.

Smart Moves

1. Invest in yourself: Set some money aside for bettering yourself and your career skills. I’m an advocate for online education, and these days, there are courses for everything. If there’s a new skill you want to learn or a side hustle you want to try, there’s probably an online course to get you started.

2. Multiple purposes: See if you can split the refund into multiple categories, including reaching your savings goals, reducing your debt and investing in personal development.

3. Pad your emergency fund: Work to put away the equivalent of three to six months of household income into an emergency fund to keep you and your family moving in case of an unexpected job loss or expense.

4. Pay down your mortgage: Paying down even a few thousand dollars of your mortgage can yield huge dividends when you get close to the pay-off date. Interest accumulates quickly on a mortgage, so try to pay it down faster if possible.

5. Max out on your Roth or traditional IRA contributions: If you are already contributing to your 401(k) at work and maxing out the company match, use your tax refund to add additional money to an IRA.

Dumb moves

1. Buying a gadget: Unless your phone is falling apart or something around your house needs a serious update, don’t spend your tax refund on a shiny new device. Purchasing depreciable assets with your tax refund is rarely a smart idea.

2. Throwing it into your checking account. To use your tax refund, the money should have a purpose before it even arrives. If you deposit all of your tax refund straight into your checking account without planning on where it’s going, you’re more likely to purchase something you don’t need.

3. Buying a new car: Around tax refund season, many car dealerships start offering special financing offers and the like. Don’t get car envy! A depreciable asset like a car isn’t a great place to spend your tax refund. Your refund is better used paying down your current car loan or used as a down payment on a more affordable used car.

4. Vacation debt: Most Americans go into debt when they go on vacation. Your tax refund shouldn’t interrupt your spending plans by acting as an influx of cash. Instead, plan to pay for your vacations as you normally would from your monthly budgets and don’t use your tax refund to accelerate your vacation plans.

5. Spending before it arrives: Don’t spend your tax refund or start moving money around until your tax refund actually arrives in your bank account. The last thing you want is for the IRS to kick back your filing with an error, leaving you stuck trying to make up the difference.

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